Canadian, Australian antitrust cops clear Microsoft-Yahoo deal

The Canadian and Australian antitrust authorities have cleared Microsoft and Yahoo’s proposed Web-search partnership, eliminating two potential barriers to combining Yahoo search and Bing.

But the big antitrust reviews by the U.S. Department of Justice and the European Union Competition Commission are still in progress.

“Microsoft and Yahoo! have been notified that Australian and Canadian authorities have separately concluded their reviews and have no objections to our proposed search agreement,” the two companies said Tuesday in a joint statement. “We continue to believe that this deal will create a true, competitive alternative in the marketplace that will benefit consumers, advertisers and publishers. We remain hopeful that the agreement will close in early 2010.”

Under the proposed 10-year deal, Bing would power Yahoo’s Web search, combining Bing and Yahoo into a larger second-place search engine behind Google. Yahoo would handle ad sales for both companies’ premium advertisers and would retain most ad revenue from its search business. More details are here.

Microsoft and Yahoo, however, have an existing partnership in Australia in which Microsoft utilizes Yahoo’s paid search-ad platform, the Australian Competition and Consumer Commission said in its public notice. So the companies already do not compete for paid search in Australia.

“Microsoft and Yahoo!’s share of online paid search advertising queries in Australia was limited,” the ACCC’s notice states. “In combining search engine platforms, Microsoft and Yahoo! may have been able to achieve the necessary scale to provide effective and sustainable competition to Google, which had a very large share of online paid search advertising queries.”

The Canadian Competition Bureau has not yet publicly released its review. But spokeswoman Alexa Thorp confirmed the bureau has finished the review and raised no objections to the Microsoft-Yahoo deal.

Microsoft and Yahoo did not have further comment Tuesday because the deal is still under review in other jurisdictions, such as the U.S. and Europe.